Beshear seeks common ground on tax reform

FRANKFORT, Ky. - Needing cash to shore up Kentucky's weakening pension system for government retirees, Gov. Steve Beshear is searching for common ground that could produce a package of tax reforms when lawmakers convene Tuesday for a 30-day session.

"I'm confident that we'll be able to find some common ground," Beshear told The Associated Press in an interview last week. "I think there's a general feeling that it would be good to broaden our tax base, that it would be good to make sure that we're as competitive as we can be with other states that we compete with from a business climate standpoint, and I think the idea that we need more revenue is gaining traction."

A commission appointed by Beshear last year to recommend tax reforms proposed a model that would generate about $690 million a year in additional revenue. Most of the money would come from taxing the pension income of retirees who draw at least $30,000 a year and from extending a sales tax to household utilities and a litany of other services that have traditionally been exempt in Kentucky.

Both could be hard sells in the Legislature.

Beshear had asked the commission to recommend a simpler tax code that would generate enough revenue to meet the state's needs even during economic recessions, the last of which led to about $1.6 billion in state budget cuts. The Democrat complimented the panel's work.

"We had some very conservative business people, some very liberal advocates and a lot of folks in between," he said. "The fact that they all came to agreement on a fairly large series of recommendations, I think, speaks well of the work that they did and the information that they gathered. Now it's my job to sit down and sift through that and talk with legislators about what's doable."